The New Economy
Holiday Season

The Holiday Season, traditionally a time for splurging and generous gift giving, is going to be a challenge for many families this year as they struggle with the new economic realities of job loss, mortgage meltdown and general financial insecurity.

Parents and kids, bombarded with irresistible TV ads, promotions and glittering in-store displays, have to face the reality of a scaled back Holiday Season, even though it's hard to resist impulse buying when it's supposed to be the season for giving and getting.

But this year is different and it may be the perfect time to introduce an alternative Holiday celebration, based more on making memories and focusing on the reason for the season, and less on commercialism and unrestrained spending.

Following are some tips for celebrating in the New Economy

1. Set a budget and stick to it. The budget should reflect current debt and monthly financial obligations. Make a list of Holiday expenses including gifts, travel, extra food, entertainment, cards and stamps, and even wrapping paper. Gifts tend to be the biggest expense so check your list and consider no-cost gifts, such as car washing, baby sitting, or mowing lawns and shoveling snow.
   
   Remember, it's a mistake to go deeper into debt when there are low cost alternatives to enjoying the Season. Make a hard copy of the budget and take it with you when you go shopping to remind yourself how much you have to spend as you resist compelling sales pitches and pressure from starry eyed kids. For more help creating a budget go to www.moneyinstructor.com.


2. Think outside the box to come up with gift ideas within the budget. Consider home made gifts or the gift of time. Minimize individual gifts and brainstorm a group present the whole family can enjoy, such as an outing to the movies, a camping trip, a subscription to Netflix, local football team tickets, or a group activity like ice skating, local theater, or a car trip.
   
   Take girls to a bead shop or do scrap booking with everyone involved in bringing the family history together. Encourage grandparents and other family members to cut back and if they insist, have them contribute to the family group gift.


3. Focus on creating memories rather than buying gifts that may be discarded as the new and better version comes along. Family traditions create those long lasting, meaningful memories, so bake cookies together, play a special board game, sing favorite songs, tell funny stories, cook a funky meal, visit family. And a very effective way of teaching kids the real meaning of giving is to start a tradition of volunteering at a local shelter, singing at a nursing home, or making an annual donation of toys and clothes you no longer need.


4. Resist competitive gift giving with an ex spouse. Parents acting responsibly around each other is the greatest gift they could give their kids who will notice and appreciate it. Set your own limits on spending with or without the cooperation of your ex spouse.

For many kids, money means the magic card that comes out of mom's wallet or cash obediently emerging from an ATM. Parents lead the way in teaching kids respect for money and the value of budgeting, saving, and buying only what you can afford. It's never too early to teach kids that money really doesn't grow on trees and there has to be money in the bank before those magic cards and ATMs can be used.

This Season may be the perfect time to teach kids the object lessons around money. Give the younger kids a piggy bank to encourage saving for special purchases and take the opportunity to explain the basics of finance to older kids, especially if there is resistance or anger about the new economy Holiday Season.

Action Step

1. Without alarming kids, have an intentional, age appropriate conversation about economic realities and make them aware that everyone is on a tight budget. Many teens have no idea about monthly expenses and are stunned to find out what it actually costs to run a home. Ask your teen what he/she thinks it costs and then compare the real cost with them. (Many teens think the monthly costs are for an entire year!)


2. Go to GiveMe20.com for useful, user friendly financial advice for kids between the ages of 12 and 22. They will learn how to create and live within a budget, the value of saving (Show Me the Money) and an understanding of basic financial terms. The most important section explains the realities of credit cards including the upsides and the downsides of impulse buying, accumulating interest, user fees and the slippery slope of credit card debt.


3. Help kids to set budgets for their own gift giving and suggest home made gifts, recycled CD's or computer games, or the gift of their time. Encourage kids to save for big ticket items by offering matching funds.

The Holiday Season represents many important things including the chance to relax, enjoy family and indulge in giving generously to those we love. The new economic realities won't prevent families connecting and enjoying the Season as before; in fact it may be more meaningful with less STUFF and more personal substance.

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